You Be the Judge

Injured Worker Wins Settlement From Employer

A judge ruled an employer erred when it terminated an injured worker's benefits because he failed to report proceeds from the sale of a horse.
By: | March 10, 2017 • 3 min read

An employee of A.W. Chesterton suffered a work-related accident while picking up a box of parts. The worker received workers’ compensation benefits, and he was required to fill out monthly questionnaires regarding his income from any business enterprise. The worker indicated that he did not receive any income.

The worker sold a horse for $3,500, and he did not indicate that he earned income on the forms. Chesterton terminated the worker’s benefits, claiming that the sale was part of a business enterprise and that the worker committed fraud when he denied being a part of any business on his forms.

Advertisement




The worker explained that he had owned horses as a hobby since he was five years old, and he was 76 at the time of trial. He said that he owned as many as 42 horses but decreased that number to seven after his accident.

Chesterton was aware that the worker raised horses while he was employed and after the accident. The worker admitted that he sold a horse but stated that it was part of his hobby of raising horses rather than any business venture. He testified that the horse he sold for $3,500 was purchased for $20,000 19 years before. He stated that prior to that sale, he last sold a horse four years before.

The workers’ compensation judge found that Chesterton failed to carry its burden of proof to establish fraud and awarded the worker supplemental earnings benefits, penalties, and attorney’s fees. Chesterton appealed.

Did the WCJ err when it determined that the employer failed to establish fraud?

  • A. No. The worker did not willfully make false statements for the purpose of obtaining workers’ compensation benefits.
  • B. Yes. The worker was involved in raising and selling horses as a business enterprise.
  • C. Yes. The worker engaged in physical labor while raising horses.

How the Court Ruled

B is incorrect. The court found that the worker was involved in raising horses as a hobby and that the sale of the horse was a sale of a personal asset. Chesterton’s adjustor admitted that had the worker sold personal property at a garage sale, those proceeds would not be material to his workers’ compensation claim.

Advertisement




C is incorrect. The worker explained that any physical work done such as cleaning stalls and feeding the animals was done out of his desire to have horses as a hobby rather than a means of income.

A is correct. In Johnson v. A.W. Chesterton, et al., No. 16-807 (La. Ct. App. 02/01/17), the Louisiana Court of Appeal held that the worker did not commit fraud when he failed to note the proceeds from the sale of the horse on his forms dealing with income from any business enterprise.

The court stated that the WCJ’s reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed unless manifestly erroneous.

Advertisement




Here, there was no manifest error in the WCJ’s findings that the worker did not willfully make false statements for the purpose of obtaining workers’ compensation benefits.

The court also found that the WCJ properly awarded penalties and attorney’s fees. The court awarded the worker additional attorney’s fees for work performed on appeal.

Editor’s note: This feature is not intended as instructional material or to replace legal advice.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2017 Risk All Stars

Immeasurable Value

The 2017 Risk All Stars strengthened their organizations by taking ownership of improved risk management processes and not quitting until they were in place.
By: | September 12, 2017 • 3 min read

Being the only person to hold a particular opinion or point of view within an organization cannot be easy. Do the following sound like familiar stories? Can you picture yourself or one of your risk management colleagues as the hero or heroine? Or better yet, as a Risk & Insurance® Risk All Star?

Advertisement




One risk manager took a job with a company that was being spun off, and the risk management program, which was built for a much larger company, was not a good fit for the spun-off company.
Rather than sink into inertia, this risk manager took the bull by the horns and began an aggressive company intranet campaign to instill better safety and other risk management practices throughout the organization.

The risk manager, 2017 Risk All Star Michelle Bennett of Cable One, also changed some long-standing brokerage relationships that weren’t a good fit for the risk management and insurance program. In her first year on the job she produced premium savings and in her second year is in the process of introducing ERM company-wide.

Or perhaps this one rings a bell. The news is trickling out that a company is poised to dramatically expand, increasing the workforce three- or four-fold. Having this knowledge with certainty would be a great benefit to a risk manager, who could begin girding safety, workers’ comp and related programs accordingly. But things sometimes don’t work that way, do they? Sometimes the risk manager is one of the last people to know.

The Risk All Star Award recognizes at its core, creativity, perseverance and passion. The 13 winners of this year’s award all displayed those traits in abundance.

In the case of 2017 Risk All Star winner Steve Richards of the Coca-Cola Bottling Company, the news of an expansion spurred him to action. He completely overhauled the company’s workers’ compensation program and streamlined its claim management system. The results, even with a much higher headcount, were reduced legal costs, better return-to-work experiences for injured workers and a host of other improvements and savings.

The Risk All Star Award recognizes at its core, creativity, perseverance and passion. The 13 winners of this year’s award all displayed those traits in abundance. Sometimes it took years for a particular risk solution, as promoted by a risk manager, to find acceptance.

In other cases a risk manager got so excited about a solution, they never even considered getting turned down. They just kept pushing until they carried the day.

Advertisement




Butler University’s Zach Finn became obsessive about what he felt was a lackluster effort on the part of the insurance industry to bring in new talent. The former risk manager for the J.M. Smucker Co. settled on the creation of a student-run captive to give his risk management students the experience they would need to get hired right out of college.

The result was a better risk management program for the university’s College of Liberal Arts and Sciences, and immediate traction in the job market for Finn’s students.

A few of our Risk All Stars told us that the results they are achieving were decades in the making. Only by year-in, year-out dedication to gaining transparency about her co-op’s risks and learning more and more about her various insurance carriers, did Growmark Inc.’s Faith Cring create a stalwart risk management and insurance program that is the envy of the agricultural sector. Now she’s been with some of her insurance carriers more than 20 years — some more than 30 years.

Having the right idea and not having a home for it can be a lonely, frustrating experience. Having the creativity, the passion and perhaps, most importantly, the perseverance to see it through and get great results makes you a Risk All Star. &

_____________________________________________

Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, perseverance and passion.

See the complete list of 2017 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]